Consider:

I think that people start with a desire to be extremists — or, at least, to feel good about themselves and condemn others — and then look around for an ideology that gives them what they want. The actual merits are far less important, as is demonstrated by the transparent idiocy of most ideologies.

This was commentary about an article warning about green extremism, likening it to the red extremism of the not too distant past. The article was semi-barren repetition of ideas voiced many times before by more careful thinkers and better writers (Gore as Marx? Ridiculous.)

There has been a flurry of commentary recently about conformism, especially in academia, the sciences in particluar, though the charge has been leveled against other disciplines many times in the past. Economists have also been the target of such accusation, especially the quants.

Should the Nobel Prize for economics be abolished? That is one of the suggestions in Pablo Triana’s provocative book Lecturing Birds on Flying. Triana, formerly a derivatives trader and academic at the University of Madrid, makes a simple assertion. Financial models, such as value at risk (VaR) and the famous Black-Scholes-Merton (BSM) model, which won its founders a Nobel, have done more harm than good. “Make no mistake, quantitative finance had a very large hand in what could well be the worst financial crisis in the history of mankind,” he writes. . .

The biggest villain of the piece is the financial academic establishment. Much of its work, he says, has been unnecessary. . .

BSM is not the only case. The Gaussian copula model, which was intended to measure default probability, failed to identify toxic structured securities and led to massive errors in valuation and credit ratings, says Triana. Likewise VaR “failed to measure risks even half-accurately and, worse, decisively encouraged and sanctioned the wild risk-taking that brought Wall Street (and consequently the world) down”.

(See previous posts that spoke of BSM and Gaussian copula.)

In one chapter, “An Unhealthy Yearning for Precision”, Triana argues that our “fear of the unknown and our desire for certainty lead us to throw ourselves into the arms of perceived ‘experts’ ... We trust quantitatively flavoured constructs to escort us away from the gloomy reality of unmeasurable uncertainty”. But they are leading us in the wrong direction. As Nassim Nicholas Taleb says in his witty introduction to the book, giving someone the wrong map is worse than giving them no map at all.

It occurs to me that conformism, yearning for precision and certainty, abdication to experts, will to extremism and lust for condemning others all are expressions and methods used for what game theorists call costly punishment and costly signalling. It's a combination of in group signalling and spite, and there has been speculation that there are evolved biological predispositions for such behavior not just in primates but also in other social species. Models of groups have been shown to be evolutionarily stable with such behaviors.

Cultures evolve too, and I suspect that we would do well to adopt some heuristics designed to counter such dangerous and destructive biological predispositions. Conformism and extremism seem to be two sides of the same mindless coin. We might be wise to always be suspicious of them and withdraw from if not shun those who slip over to the dark side and give in to such predispositions. Our democracies would be improved, our meritocracies would have greater merit, and our experts might, against all odds, actually possess expertise.

Update: Robin comments:

Wade and Shiller both mistakenly assume that what we mainly need is to be aware of group think. Wade thinks this awareness will make us question global warming consensus, while Shiller thinks it should have made Greenspan see the housing bubble. But after 37 years, the group think idea is pretty well known. The problem is that simply knowing that the group might be wrong is very different from knowing where in particular they are wrong.

Most groups have a long queue of contrarian ideas they are neglecting. What groups need are ways to get them to devote more resources to this entire contrarian set, especially the true parts of the set. Like, say, prediction markets. But if instead of proposing some structural, cultural, or institutional reform to achieve this, you just argue “there can be group think, so my contrarian view deserves more attention” you are really just using group think as an excuse to try to jump the queue. You aren’t really fighting group think at all.

Far more people like to complain about group think when they think their contrarian ideas neglected, than are willing to support prediction markets or other reforms to encourage attention overall to more and better contrarian ideas. Who will really fight group think?

He's right that there is need for better methods, and prediction markets are a leading candidate. I think that he dismisses queue jumping too lightly since it does have the potential to improve outcomes by leveraging the evolved predisposition of humans to chastise one another. If the sin is group think then group thinkers who enjoy haranguing their mates can improve outcomes despite their mental defects.